Smart contract-managed decentralized lending processes using collateral tokens

Abstract

A loan process smart contract manages a collateralized loan process for a loan against a collateralized item, the collateralized loan process including tokenizing and locking a collateral token that tokenizes the collateral item, executing a loan process workflow that comprises a safekeeping stage, followed by one or more of an authentication stage and an appraisal stage, monitoring terms of the loan, and detecting an unlocking event of the loan for unlocking the collateral token.

What is claimed is: 
     
         1 . A method comprising:
 receiving, by one or more processing devices, a request to initiate a loan process from a user device, the request indicating a collateral item of a borrower; and   executing, by the one or more processing devices, a set of smart contracts that collectively define computer-readable instructions that are configured to manage a loan process workflow defined in a system-level governance, wherein the loan process workflow defines a set of stages of the loan process and the set of smart contracts are configured with a set of conditions that, when electronically verified by the one or more processing devices, trigger a respective stage of the set of stages, wherein the set of stages include:
 a safekeeping stage that is automatically triggered upon receiving the request to initiate the loan process, wherein during the safekeeping stage a safekeeping task is assigned to a safekeeper and the set of smart contracts are configured to issue a safekeeping notification in response to electronically verifying that the safekeeping task has been successfully completed by the safekeeper based on a safekeeper report submitted by the safekeeper, further wherein issuing the safekeeping notification triggers one or more stages in the set of stages, the one or more stages including at least one of:
 an appraisal stage during which the appraisal stage an appraisal task is assigned to one or more appraisers and the set of smart contracts are configured to issue an appraisal task notification in response to electronically verifying that the appraisal task has been successfully completed by the one or more appraisers; and 
 an authentication stage during which an authentication task is assigned to one or more authenticators and the set of smart contracts are configured to issue an authentication task notification in response to electronically verifying that the authentication task has been successfully completed by the one or more authenticators based on an authentication report electronically submitted by the one or more authenticators via one or more authenticator devices; 
 
 a tokenization stage that is automatically triggered from successful completion of the one or more stages, wherein during the tokenization stage, the set of smart contracts initiates generation of a redeemable collateral token that is cryptographically linked with a virtual representation of the collateral item and that is redeemable by an owner of collateral token to take possession of the collateral item from the safekeeper, and wherein the collateral token is stored on a distributed ledger with ownership data that initially assigns the collateral token to the borrower; 
 a loan negotiation stage that is triggered in response to at least one of the safekeeping notification and the tokenization of the collateral item, wherein the set of smart contracts receives a set of loan term parameters that were agreed to by a lender; and 
 a loan repayment stage that is triggered in response to receipt of the loan term parameters, wherein during the loan repayment stage the set of smart contracts:
 locks the collateral token on the distributed ledger, thereby preventing assignment or redemption of the collateral token until an occurrence of an unlocking event of a plurality of unlocking events, 
 monitors a payment listening thread that listens for electronic payment notifications issued in connection with the loan to determine whether one of the plurality of unlocking events has occurred, and 
 in response to determining an unlocking event of the plurality of unlocking events has occurred, unlocks the collateral token and assigns the collateral token to an account on the distributed ledger based on which of the plurality of unlocking events has occurred. 
 
   
     
     
         2 . The method of  claim 1 , wherein receiving the request to initiate the loan process is a condition in the set of conditions that, when electronically verified, triggers the safekeeping stage. 
     
     
         3 . The method of  claim 1 , wherein issuing the appraisal task notification is a condition in the set of conditions that, when electronically verified, triggers the authentication stage. 
     
     
         4 . The method of  claim 1 , wherein issuing the authentication task notification is a condition in the set of conditions that, when electronically verified, triggers the appraisal stage. 
     
     
         5 . The method of  claim 1 , wherein issuing the safekeeping notification is a condition in the set of conditions that, when electronically verified, triggers the one or more stages in the set of stages. 
     
     
         6 . The method of  claim 1 , wherein the tokenization of the collateral item is a condition in the set of conditions that, when electronically verified, triggers the loan negotiation stage. 
     
     
         7 . The method of  claim 1 , wherein receipt of the loan term parameters is a condition in the set of conditions that, when electronically verified, triggers the loan repayment stage. 
     
     
         8 . The method of  claim 1 , wherein generation of a redeemable collateral token includes instantiating a collateral token smart contract that comprises executable instructions that define conditional logic relating to redemption of the collateral token and assignments of the collateral token. 
     
     
         9 . The method of  claim 8 , wherein the collateral token smart contract is configured to:
 receive a redemption request from a user device of a redeeming user to redeem the collateral token;   determine whether the collateral token is associated with a user account of the redeeming user on the distributed ledger;   in response to confirming that the collateral token is associated with the user account of the redeeming user, issue a redemption notification to a safekeeper of the collateral item; and   in response to receiving a verification from a device of the safekeeper that the collateral item has been successfully redeemed by the redeeming user, burn the collateral token.   
     
     
         10 . The method of  claim 1 , wherein the set of smart contracts locks the collateral token by locking the collateral token in an escrow account on the distributed ledger until an unlocking event of the set of unlocking events is detected, whereby the collateral token is prevented from being redeemed or assigned to another account while the collateral token remains locked in the escrow account. 
     
     
         11 . The method of  claim 1 , wherein the set of smart contracts monitors a payment listening thread by monitoring a repayment status of the loan in accordance with the loan term parameters. 
     
     
         12 . The method of  claim 11 , wherein the loan term parameters include a loan amount that the borrower will borrow from the lender, a set of repayment parameters, and a set of unlocking events, wherein the set of unlocking events include a loan repayment event that defines a first set of electronically verifiable conditions that must be met to determine that the loan has been fully repaid and a loan default event that defines a second set of electronically verifiable conditions that must be met to determine that the borrower has defaulted on the loan. 
     
     
         13 . The method of  claim 1 , wherein the set of loan term parameters is based on the set of smart contracts electronically verifying that the collateral item has been deemed authentic by one or more authenticators based on an electronic authentication report. 
     
     
         14 . The method of  claim 1 , wherein the set of loan term parameters is based on the set of smart contracts electronically verifying that the one or more authenticators have deemed the collateral item authentic in compliance with an authentication stage-level governance. 
     
     
         15 . The method of  claim 1 , wherein the set of smart contracts execute a set of listening threads that verify that the collateral item has been authenticated by the one or more authenticators based on authentication reports that are written to a distributed ledger. 
     
     
         16 . The method of  claim 1 , wherein the set of smart contracts are executed at least in part by a set of node devices that store the distributed ledger. 
     
     
         17 . The method of  claim 1 , wherein the plurality of unlocking events includes a loan repayment event that defines a first set of electronically verifiable conditions that must be met to determine that the loan has been fully repaid and a loan default event that defines a second set of electronically verifiable conditions that must be met to determine that the borrower has defaulted on the loan. 
     
     
         18 . The method of  claim 17 , wherein in response to the set of smart contracts determining that a loan repayment unlocking event has occurred, assigning the collateral token to an account of the borrower. 
     
     
         19 . The method of  claim 17 , wherein in response to the set of smart contracts determining that a loan default unlocking event has occurred, assigning the collateral token to an account of the lender. 
     
     
         20 . The method of  claim 1 , wherein in response to the set of smart contracts determining that a loan default unlocking event has occurred, executing a loan default workflow. 
     
     
         21 . The method of  claim 1 , wherein the loan process smart contract instance is executed at by a set of node devices that store the distributed ledger.